Proposal for a COUNCIL DECISION amending Decision 2004/162/EC as regards the products that may benefit from exemption from or a reduction in dock dues 
Date: 2010-12-14
Institutions: European Commission
Subjects: French overseas department and region, import tax, local tax, tax system

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EUROPEAN COMMISSION 

Brussels, 14.12.2010 
COM(2010) 749 final 

2010/0359 (CNS) 

Proposal for a 

COUNCIL DECISION 

amending Decision 2004/162/EC as regards the products that may benefit from 
exemption from or a reduction in dock dues 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The Treaty on the Functioning of the European Union (TFEU), which applies to the 
outermost  regions  of  the  EU,  which  include  the  four  French  overseas  departments 
(DOMs),  does  not  in  principle  allow  any  difference  in  the  DOMs  between  the 
taxation of local products and the taxation of products from metropolitan France or 
the other Member States. Article 349 of the TFUE (former Article 229(2) of the EC 
Treaty)  provides,  however,  for  the  possibility  of  introducing  specific  measures  for 
those  regions  because  of  the  permanent  handicaps  which  affect  the  economic  and 
social conditions of the outermost regions. 

Council  Decision  2004/162/EC  of  10  February  2004,  adopted  on  the  basis  of 
Article 299(2)  of  the  EC  Treaty,  authorises  France,  up  to  1 July  2014,  to  apply 
exemptions from or reductions in the tax known as "dock dues" to certain products 
manufactured in the DOMs. The Annex to that Decision contains a list of products to 
which  tax  exemptions  and  reductions  may  be  applied.  The  difference  between  the 
taxation of locally manufactured products and the taxation of other products may not 
exceed 10, 20 or 30 percentage points, depending on the product.  

Decision  2004/162/EC  sets  out  the  reasons  for  adopting  specific  measures,  which 
include  isolation,  raw  material  and  energy  dependence,  the  obligation  to  build  up 
stocks,  the  small  size  of  the  local  market  and  the  low  level  of  export  activity.  The 
combination  of  these handicaps means that  production costs, and therefore the  cost 
price of goods produced locally, are increased, so that without specific measures they 
would be less competitive than goods produced elsewhere, even taking into account 
the  cost  of  transporting  the  latter  to  the  DOMs.  This  would  make  it  harder  to 
maintain local production. The specific measures contained in Decision 2004/162/EC 
were thus designed to strengthen local industry by making it more competitive. 

Article 4 of Decision 2004/162/EC provides that the French authorities must present 
to  the  Commission  by  31  July  2008  a  report  on  the  application  of  the  tax 
arrangements  authorised  by  the  Decision,  in  order  to  check  the  impact  of  the 
measures  taken  and  their  contribution  to  promoting  or  maintaining  local  economic 
activities, in the light of the handicaps affecting the outermost regions. On the basis 
of  this  report,  the  Commission  must  present  a  report  to  the  Council  giving  a  full 
economic  and  social  analysis  and,  where  appropriate,  a  proposal  for  adapting  the 
provisions of Decision 2004/162/EC. 

On  31 July  2008  the  French  authorities  accordingly  submitted  their  report  to  the 
Commission.  It  was  later  supplemented.  The  report  from  the  French  authorities 
includes  a  request  for  the  list  of  products  to  which  differentiated  taxation  may  be 
applied to be updated for French Guiana. 

The Commission's report has been presented to the Council today1. It is accompanied 
by this proposal for a Council Decision. 

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COM(2010) xxx final of xx.xx.2010. 

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2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

The French authorities' request concerning French Guiana was a response to requests 
from  the  economic  sectors  concerned.  In  addition,  representatives  of  the  economic 
sectors  most  affected  by  the  French  authorities'  request  concerning  French  Guiana 
were present in several delegations at working meetings with the French authorities. 

The Commission has not used an impact assessment. 

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LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed measures 

To  update,  in  the  light  of  the  findings  made,  the  lists  of  products  in  the  Annex  to 
Decision  2004/162/EC,  to  which  France  is  authorised,  within  certain  limits,  to  apply 
exemptions  from  or  reductions  in  the  tax  known  as  "dock  dues"  for  certain  products 
manufactured locally in the French overseas departments. 

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Legal basis 

Article 349 TFEU. 

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Subsidiarity principle 

Only  the  Council  is  authorised,  on  the  basis  of  Article  349  TFEU,  to  adopt  specific 
measures in favour of the outermost regions to adjust the application of the Treaties to 
those  regions,  including  the  common  policies,  because  of  the  permanent  handicaps 
which affect the economic and social conditions of the outermost regions. 

The proposal therefore complies with the subsidiarity principle. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons. 

Its  purpose  is  to  update  Decision  2004/162/EC.  It  concerns  only  products  for  which 
such an adaptation has proved necessary. 

Equally, the maximum differential proposed for each product covered by this proposal 
is limited to what is necessary in view of the higher costs affecting the local production 
concerned in each case. In this way, the tax burden on products imported into French 
overseas  departments  will  not  exceed  what  is  necessary  to  offset  the  lower 
competitiveness of products manufactured locally compared with imported products. 

Choice of instrument 

Proposed instrument: Council Decision. 

Other instruments would not have been appropriate for the following reasons. 

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The text to be amended is itself a Council Decision, adopted on the same legal basis 
(Article 299(2) of the then EC Treaty).  

4. 

BUDGETARY IMPACT 

The proposal has no impact on the budget of the European Union. 

5. 

OPTIONAL ELEMENTS 

Recitals 4 to 15 of the proposal for a Council Decision set out the amendments which 
it  proposes  to  make  to  the  lists  of  products  in  the  Annex  to  Decision  2004/162/EC 
and the reasons therefore. 

France  will  need  time  to  adjust  its  domestic  legislation  to  the  removal  of  products 
from  the  lists  in  Decision  2004/162/EC.  It  is  therefore  proposed  that  the  date  of 
application  of  this  amending  Decision  be  deferred  until  after  the  date  of  its 
notification (see Article 2). 

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2010/0359 (CNS) 

Proposal for a 

COUNCIL DECISION 

amending Decision 2004/162/EC as regards the products that may benefit from 
exemption from or a reduction in dock dues 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 349 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Parliament2, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Council Decision 2004/162/EC of 10 February 2004 concerning the dock dues in the 
French  overseas  departments  and  extending  the  period  of  validity  of  Decision 
89/688/EEC3authorises the French authorities to apply exemptions from or reductions 
in the dock dues tax for the products listed in its Annex. The maximum permitted tax 
differential is, depending on the products and the overseas department in question, 10, 
20 or 30 percentage points. 

In  accordance  with  the  second  paragraph  of  Article  4  of  Decision  2004/162/EC,  on 
31 July  2008  the  French  authorities  presented  to  the  Commission  a  report  on  the 
application  of  the  taxation  arrangements  provided  for  in  that  Decision.  On 
22 December 2008 a supplement was submitted, and the further information requested 
by the Commission on 15 April 2009 was sent to it on 16 April 2010. The report from 
the French authorities includes a request for the list of products to which differentiated 
taxation may be applied to be adapted for French Guiana. 

On  the  basis  of  the  report  from  the  French  authorities,  the  Commission  presented  to 
the  Council  the  report4  provided  for  in  the  third  paragraph  of  Article 4  of 
Decision 2004/162/EC and a proposal for amendments to the Decision. The proposals 
concern either the four DOMs or French Guiana specifically.  

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OJ C , , p. . 
OJ L 52, 21.2.2004, p. 64. 
COM(2010) xxx final of xx.xx.2010. 

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(4) 

(5) 

(6) 

(7) 

(8) 

It should first be noted that there is no longer any local production of certain products 
in  the  DOM  concerned,  and  the  French  authorities  no  longer  apply  differentiated 
taxation  to  certain  other  products  because  those  produced  locally  are  now  at  a  price 
equivalent  to  that  of  products  from  outside  the  DOM.  They  should  therefore  be 
removed  from  the  lists  in  the  Annex  to  Decision  2004/162/EC.  This  is  the  case  in 
Guadeloupe  for  margarine  (product  1517 105)  and  for  pebbles,  gravel,  etc.  (product 
2517  10).  In  the  case  of  Martinique  the  products  concerned  are  anti-freezing 
preparations  and  prepared  de-icing  liquids  (product  3820),  margarine  (product 
1517 10) and certain acids (product 2811). Lastly, the products concerned in the case 
of  Réunion  are  soya-bean  oil  (product  1507 90),  certain  olive  oils  (product 
1510 00 90),  certain  chemical  products  (products  2828 10 00  and  2828 90 00)  and 
certain photographic materials (product 3705 10 00). 

Secondly,  the  tax  differential  actually  applied  is,  for  a  limited  number  of  products, 
significantly below the maximum authorised. The maximum differential authorised for 
these products should therefore be reduced as there is no specific reason to believe that 
an  increase  in  the  existing  tax  differential  may  become  necessary  in  the  near  future. 
For  Guadeloupe,  the  products  concerned  are  certain  meats  (product  0210),  certain 
vegetables (products 0702, 0705, 0706 10 00, 0707 00, 0709 60 and 0709 90), certain 
kinds  of  animal  feedstuffs  (product  2309),  certain  paints  (products  3208,  3209  and 
3210),  certain  abrasive  products  (product  6805)  and  certain  glasses  for  corrective 
spectacles  (product  7051 10 00).  For  French  Guiana,  the  products  concerned  are 
certain  kinds  of  rice  (product  1006 20).  For  Martinique  they  are  certain  cereals 
(product 1008 90 90), certain flours (product 1102) and pebbles, gravel, etc. (product 
2517 10). 

Thirdly,  in  certain  cases  the  products  manufactured  locally  do  not  appear  to  be  less 
competitive  than  those  coming  from  outside  the  DOMs.  These  concern  products 
currently  falling  within  part  A  of  the  Annex  to  Decision  2004/162/EC  where  the 
volume  of  production  in  the  DOM  concerned  is  high  and,  although  the  differential 
applied is small, no imports of equivalent products have been recorded in the last three 
years  analysed.  These  products  should  therefore  be  removed  from  the  lists  in  the 
Annex to Decision 2004/162/EC. For Guadeloupe the products concerned are certain 
food  production  residues  (product  2302).  For  Réunion  the  products  concerned  are 
certain residues from the manufacture of wood pulp (product 3804 00). 

The  amendments  relating  specifically  to  French  Guiana,  namely  the  addition  of  new 
products and an increase in the differential authorised for certain products, are justified 
in each case by the higher costs of the products manufactured locally compared with 
equivalent imported products manufactured in the European territory of the Union. 

The amendments  to be made in this respect for  French Guiana  consist  principally in 
adding  to  the  lists  in  the  Annex  to  Decision  2004/162/EC  the  products  which  were 
already being manufactured locally in 2004 and for which no request for inclusion in 
the list of products to which differential taxation may be applied was made in 2004.  

(9) 

In the agriculture, fisheries and agri-food industry sectors, the products to be included 
in  the  lists  in  the  Annex  to  Decision  2004/162/EC  are  certain  meats  (products  0201, 

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According to the classification of the Common Customs Tariff nomenclature. 

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0202, 0203, 0204, 0208 and 0210), certain species of fish (products 0304 and 0305), 
certain  meat  preparations  (products  1601  and  1602),  certain  sugar  products  (product 
1702), certain breads, cakes or pastries (product 1905), certain preserved vegetables or 
fruit  (products  2001  and  2006),  jams  (product  2007),  certain  sauces  (product  2103), 
ice cream and other edible ice (product 2105), certain miscellaneous food preparations 
(product  2106)  and  certain  liqueurs  and  cordials  and  rum-based  beverages  (products 
2208 70 and 2208 90). 

(10) 

In  the  housing  and  construction  sector  the  products  concerned  are  certain  plastic 
products  (products  3919  and  3926),  certain  articles  of  cement,  concrete  or  artificial 
stone,  (product  6810  19)  and  certain  iron  products  (products  7210,  7214  20,  7216, 
7217 90 90, 7309, 7310 and 7314). 

(11)  For  products  derived  from  forestry  and  other  miscellaneous  products,  the  products 
concerned  are  various  woods  and  joinery  products  (products  4403 99 95,  4407 22, 
4407 99 96, 4409 29 91, 4409 29 99, 4418 (except subheadings 4418 10 50, 4418 20 
50, 4418 71, 4418 72 and 4418 79)), certain categories of furniture (products 9403 40 
10 and 9406 except subheading 9406 00 31), certain printed products (products 4910 
and 4911) and certain items of clothing (products 6109, 6205 and 6206). 

(12)  For some products already included in the lists in the Annex to Decision 2004/162/EC, 
still referring to French Guiana, either the maximum differential concerned should be 
extended  to  cover  subheadings  of  the  Combined  Nomenclature  which  they  do  not 
currently cover, or the maximum differential should be increased, or both.  

(13)  Thus all fruit juices (product 2009), all mineral waters containing added sugar or other 
sweetening  matter  or  flavoured  (product  2202)  and  all  plastic  articles  for  the 
conveyance  or  packaging  of  goods  (product  3923)  should  be  included  in  list  C  of 
products to which a tax differential of 30 percentage points may be applied, while fruit 
juices of subheading 2009 80, mineral waters of heading 2202 10 and plastic articles 
for the conveyance or packaging of goods (product 3923), for which a tax differential 
of 20 percentage points is currently authorised, should be removed from list B.  

(14) 

In the case of cements, in list B (products to which a tax differential of 20 percentage 
points may be applied) white cement (product 2523 21 00) should be replaced by other 
Portland  cement  (product  2523 29).  For  structures  and  parts  of  structures  of  iron  or 
steel,  the  authorised  tax  differential  of  20  percentage  points  should  be  applied  to  all 
products of heading 7308 and not only to those of subheading 7308 90, as at present. 
For  articles  of  aluminium,  the  tax  differential  of  20 percentage  points  should  be 
applied to all products of heading 7610 and not only to those of subheading 7610 90, 
as at present. This would mean that this tax differential could also be applied to doors, 
windows, doorframes and thresholds for doors of heading 7610 10.  

(15)  Finally, still in the case of French Guiana, three products which are not yet produced 
locally but for which there are concrete plans to launch production in the near future, 
should  be  added  to  the  lists  of  products  to  which  differentiated  taxation  may  be 
applied.  They  are:  milk  (product  0401),  mineral  waters  (product  2201)  and  certain 
articles of stone or other mineral substances (product 6815).  

(16)  Decision 2004/162/EC should therefore be amended accordingly, 

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HAS ADOPTED THIS DECISION:  

Article 1 

The  Annex  to  Decision  2004/162/EC  is  amended  in  accordance  with  the  Annex  to  this 
Decision. 

This Decision shall apply from […].  

Article 2 

Article 3 

This Decision is addressed to the French Republic. 

Done at Brussels, 

For the Council 
The President 

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The Annex to Decision 2004/162/EC is amended as follows: 

ANNEX  

1) Part A is amended as follows: 

a) Point 1 is amended as follows: 

i) The following products are inserted: 

"0210, 0702, 0705, 0706 10 00, 0707 00, 0709 60, 0709 90, 2309, 6805". 

ii) Product "2302" is deleted. 

b) The following products are inserted in point 2: "1006 20, 2201". 

c) Point 3 is amended as follows: 

i) The following products are inserted: 

"1008 90 90, 1102, 2517 10". 

ii) Product "2811" is deleted. 

b) The following products are deleted from point 4: "3705 10 00, 3804 00". 

2) Part B is amended as follows: 

a) Point 1 is amended as follows: 

i) The following products are inserted: 

"3208, 3209, 3210, 7015 10 00". 

ii) The following products are deleted: 

"0210, 0702, 0705, 0706 10 00, 0707 00, 0709 60, 0709 90, 2302, 2309, 6805". 

b) Point 2 is amended as follows: 

i) The following products are inserted: 

"0201,  0202,  0203,  0204,  0208,  0210,  0304,  0305,  0401,  1905,  2105,  2523  29,  3919,  3926, 
4910, 4911, 6109, 6205, 6206, 6810 19, 6815, 7210, 7214 20, 7216, 7217 90 90, 7308, 7309, 
7310, 7314, 7610". 

ii) The following products are deleted: 

"1006 20, 2009 80, 2202 10, 2523 21 00, 3923, 7308 90, 7610 90". 

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c)  The  following  products  are  deleted  from  point  3:  "1008  90  90,  1102,  3820  except 
3820 00 00". 

d)  The  following  products  are  deleted  from  point  4:  "1507 90,  1510 00 90,  2828 10 00, 
2828 90 00". 

3) Part C is amended as follows: 

a)  The  following  products  are  deleted  from  point  1:  "1517  10,  2517  10,  3208,  3209,  3210, 
7015 10 00". 

b) The following products are inserted in point 2: "1601, 1602, 1702, 2001, 2006, 2007, 2009, 
2103, 2106, 2202, 2208 706, 2208 907, 3923, 4403 99 95, 4407 22, 4407 99 96, 4409 29 91, 
4409 29 99, 4418 except 4418 10 50, 4418 20 50, 4418 71, 4418 72 and 4418 79, 9403 40 10, 
9406 except 9406 00 31". 

c) The following products are deleted from point 3: "1517 10, 2517 10". 

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Only rum-based products of heading 2208 40. 
Only rum-based products of heading 2208 40. 

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